July 2019, Vol. 246, No. 7
Global News
Saudi Aramco Inks 20-year Deal with Sempra for LNG Supply
Saudi Aramco has signed a 20-year agreement to buy LNG from an export terminal that U.S.-based Sempra Energy is developing on the Texas Gulf Coast.
Aramco will buy a 25% equity stake in the first phase of the multibillion-dollar project, to be constructed in Port Arthur, about 90 miles from Houston, the companies said. The sale-and-purchase agreement for 5 MTPA of LNG is Saudi Arabia’s first known, non-binding agreement to buy LNG and the largest such LNG deal since 2013, according to Wood Mackenzie.
“Port Arthur LNG could be one of the largest LNG export projects in North America, with potential expansion capabilities of up to eight liquefaction trains or approximately 45 MTPA of capacity,” the companies said. The facility is one of five LNG development opportunities proposed in North America by Sempra, which received regulatory approval to construct and operate the facility and related pipelines in April.
Sempra said it plans to make a final investment decision to build the first phase of Port Arthur in the first quarter of 2020. The proposed first phase of the Port Arthur project will include two liquefaction trains, up to three LNG storage tanks and associated facilities, which should enable the export of about 11 MTPA of LNG.
The United States has become the world’s fourth-largest LNG exporter since it started exports LNG from the Lower 48 states in 2016 and has been a net exporter of natural gas every month for the past year, according to the U.S. Energy Information Administration (EIA), which projects 5% annual growth in global LNG demand through the mid-2020s. P&GJ
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